Total Recycling Servs. of Conn., Inc. v. Conn. Oil Recycling Servs., LLC., 18823.

Decision Date23 April 2013
Docket NumberNo. 18823.,18823.
Citation308 Conn. 312,63 A.3d 896
CourtConnecticut Supreme Court
PartiesTOTAL RECYCLING SERVICES OF CONNECTICUT, INC., et al. v. CONNECTICUT OIL RECYCLING SERVICES, LLC.

OPINION TEXT STARTS HERE

William J. Sweeney, Jr., New Britain, for the appellant (defendant).

Jonathan J. Klein, Bridgeport, for the appellees (plaintiffs).

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH and HARPER, Js. *

ZARELLA, J.

The certified issue in this appeal is whether the Appellate Court properly upheld the trial court's denial of the defendant's motion for contractual attorney's fees. The defendant, Connecticut Oil Recycling Services, LLC, claims that the Appellate Court improperly concluded that the trial court did not abuse its discretion when it declined to award any attorney's fees, applying the law of the case doctrine, after the defendant was unable to itemize such fees to the court's satisfaction. The defendant maintains that itemization under these circumstances was impracticable because the fees related to the same transaction and could not be adequately allocated among the contracts. The plaintiffs,Whitewing Environmental Corporation (White-wing) and Total Recycling Services of Connecticut, Inc. (Total Recycling), a wholly-owned subsidiary of White-wing, respond that the Appellate Court properly upheld the trial court's denial of attorney's fees because the trial court correctly (1) determined that the standard set forth by the Appellate Court in Jacques All Trades Corp. v. Brown, 57 Conn.App. 189, 752 A.2d 1098 (2000)( Jacques ), was the law of the case, and (2) applied the Jacques standard in denying attorney's fees when the defendant failed to prove the amount of fees that resulted from the contracts providing for fees. We reverse the judgment of the Appellate Court.

The following facts and procedural history are relevant to our resolution of the present appeal. The defendant contracted with the plaintiffs to purchase their oil recycling business, which the parties carried out using three contracts. These contracts, which were entered into on or about March 1, 2004, included (1) a contract between Total Recycling and the defendant for the purchase of certain equipment (equipment contract), (2) a contract between Total Recycling and the defendant for the purchase of goodwill (goodwill contract), and (3) an agreement not to compete between Whitewing and the defendant (noncompete agreement). Of these, all but the equipment contract contained provisions entitling the defendant to attorney's fees in the event that the plaintiffs breached the agreements.1 See Total Recycling Services of Connecticut, Inc. v. Connecticut Oil Recycling Services, LLC, 114 Conn.App. 671, 679–80, 970 A.2d 807 (2009).

In April, 2006, the plaintiffs commenced the present action, seeking damages for the defendant's alleged breach of the three contracts at issue and for unjust enrichment. The defendant denied the allegations in the plaintiffs' four count complaint and responded with a five count counterclaim, alleging, inter alia, breach of contract and seeking attorney's fees under the relevant provisions of the goodwill contract and the noncompete agreement. The jury found in favor of the plaintiffs with respect to their unjust enrichment claims but rejected the plaintiffs' contract claims, finding that the plaintiffs' failure to perform under the contracts barred their recovery. With respect to the counterclaim, the jury likewise concluded that the plaintiffs had breached the contracts with the defendant but awarded damages to the defendant only with respect to the plaintiffs' breach of the equipment contract.

Thereafter, the trial court denied the defendant's motion for attorney's fees because the defendant was awarded damages solely with respect to the breach of the equipment contract, which did not provide for attorney's fees. On the defendant's initial appeal to the Appellate Court, the Appellate Court reversed the trial court's determination with respect to attorney's fees, concluding that “the trial court improperly [determined] that the jury's verdict with respect to the [equipment contract] precluded the defendant's recovery of reasonable attorney's fees under the other two contracts between the parties; id., at 681, 970 A.2d 807; because the contracts conditioned the entitlement to attorney's fees on breach rather than an award of damages. 2Id., at 680–81, 970 A.2d 807. The Appellate Court remanded the case to the trial court for a new hearing on the defendant's claim for attorney's fees. Id., at 681, 970 A.2d 807.

On remand, the defendant filed a motion for attorney's fees and an affidavit in support of such fees, to which it attached detailed billing records. The plaintiffs opposed this motion and further claimed that the defendant's recovery, if any, was limited to no more than 5 percent of the maximum recoverable amount under their calculations.3 In a memorandum of decision dated November 27, 2009, the trial court, Jones, J., found it “necessary for the defendant to identify which reasonable attorney's fees were incurred in prosecuting its breach of contract counterclaim with regard to the contracts that specifically provide[d] for attorney's fees.” The court “invited” the defendant “to make that showing and to provide authority to the court for an award of the attorney's fees incurred in its appeal.”

On January 12, 2010, in response to the trial court's invitation, the defendant filed a renewed motion for costs and attorney's fees, which the plaintiffs opposed. The defendant maintained that the apportionment of fees that the trial court sought was impossible under the circumstances, and analogized the present case to Heller v. D.W. Fish Realty Co., 93 Conn.App. 727, 734–36, 890 A.2d 113 (2006), a case in which the AppellateCourt allowed for an unapportioned recovery of attorney's fees, even though only one of the claims allowed for attorney's fees, where the claims depended on the same facts. The defendant likewise brought to the court's attention certain federal cases that had extended this principle beyond discretionary attorney'sfees under the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42–110a et seq., to encompass contractual attorney's fees, and claimed that Jacques All Trades Corp. v. Brown, supra, 57 Conn.App. 189, 752 A.2d 1098, an earlier Appellate Court case that required apportionment, was factually distinguishable from the present case. See id., at 199–200, 752 A.2d 1098.

The trial court, Bear, J., thereafter ordered an evidentiary hearing on the defendant's motion for attorney's fees. At a hearing held on March 29, 2010, the defendant presented the unopposed expert testimony of William Gallagher, an attorney with forty-seven years of experience, who opined that apportionment in a case such as the present one was neither practicable nor consistent with general legal billing practices. Gallagher also explained that Heller allowed for an award of attorney's fees when [legal] services are intertwined in such a way that [it is] not possible to sort them out....” Accordingly, the defendant did not attempt to apportion the attorney's fees among the claims and counterclaims, or among the three contracts and, instead, claimed that it was entitled to recover the full amount of attorney's fees.

On April 19, 2010, the court, Bear, J., denied the defendant's motion for attorney's fees, explaining that “Judge Jones' determination that ... [the] defendant needed to identify which reasonable attorney's fees were incurred in prosecuting its breach of contract counterclaim with regard to the two ... contracts that specifically provided for attorney's fees is the law of this case.... The defendant did not address the law of the case issue at the March 29, 2010 hearing. Instead, the defendant tried ... to justify its noncompliance with such order. The defendant thus did not prove which of its claimed attorney's fees related to the two contracts that permitted the award of such fees and in such hearing it particularly did not ... identify which reasonable attorney's fees were incurred in prosecuting its breach of contract counterclaims with regard to the contracts that specifically provide for attorney's fees ... [and] make that showing....” (Citation omitted; internal quotation marks omitted.)

Following the trial court's denial of the defendant's motion for attorney's fees, the defendant appealed to the Appellate Court. A divided Appellate Court upheld the trial court's denial of attorney's fees. Total Recycling Services of Connecticut, Inc. v. Connecticut Oil Recycling Services, LLC, 129 Conn.App. 296, 305, 20 A.3d 716 (2011). In the majority opinion, the Appellate Court first considered the defendant's arguments that the trial court “should not have applied the law of the case doctrine and that Heller, rather than [ Jacques ], govern[ed] the outcome of [the] case.” Id, at 302, 20 A.3d 716. Specifically, the defendant argued that, “under Heller, all related claims become eligible for attorney's fees [when] a statutory or contractual provision provides for such fees” and that, when “litigation arises out of the same transaction and the same set of facts, it is not practical to distinguish the fees incurred for such related claims.” Id., at 303, 20 A.3d 716. The Appellate Court disagreed, concluding that this was an overly broad interpretation of Heller.Id. Instead, the court determined that [n]either Heller nor [ Jacques ] stands for the general proposition that [when] a party is entitled to attorney's fees, whether by statute or by contract, fees incurred for litigating any and all related claims may be recoverable by the litigant.” Id. The court was not persuaded by the defendant's argument that the pleadings in the case did not distinguish between the contracts involved in the transaction, reasoning that, “despite the form of the pleadings, the [jury] interrogatories ... enabled...

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